Sunday, June 18
Finance director studying scope of fuel-card use

No fewer than 164 Fuelman cards have been issued to Madison County public servants, both paid and volunteer, and even more are likely to be discovered, according to an audit of county credit cards by The Jackson Sun.

And the number of potential users for those cards presents the most troubling aspect of Fuelman. It could easily run to more than 1,000, which increases the chances for misuse.

Yet with more than 160 cards and the potential for thousands of users, the county has no written policy for the use of Fuelman, or for monitoring its use. In essence, if a department head signs off, the county writes a check to pay the bill. "Right now, we don't know how the department heads are going through those things," said Mike Nichols, the director of the county's Finance Department. "Basically, when we get the information down here, if the department has signed off on them and said all these Fuelman purchases are OK, we write the check. We haven't had time in the past to go through and check on this, that and the other."

That's a concern to the Finance Department, which is attempting to track not only Fuelman but also every purchasing card used by county government. The Finance Department's tracking efforts come in the wake of a state audit that sharply criticized several county departments - and the department heads - for sloppy record keeping and questionable spending practices. Two of the departments widely criticized in the audit, the Health Department and the sheriff's department, are also among the highest users of the Fuelman card.

Based on information provided to the newspaper from county department heads, elected officials and the Finance Department, Fuelman is by far the most prevalent purchasing card used by the county. At least 10 county departments use Fuelman cards to purchase gasoline or diesel for their vehicles.

Used properly, Fuelman cards do provide a level of security that regular credit cards do not. Each card has its own PIN number, which is a security measure to help track the card's use. However, if PIN numbers are shared and signatures are forged, the county could suffer financially from fraudulent use. Plus, it's possible for an authorized card user to put gas in a county vehicle, remove the nozzle and reach across to the other side of the pump and put gas into his or her personal vehicle. There is no record of anyone being suspected of that behavior.

"Fuelman can be pretty safe because you've got a PIN number on that card, and you put the vehicle down, the mileage and that sort of thing (when you purchase fuel)," Nichols said. "If someone (in administration) is checking all of that, it would be pretty difficult to do (abuse the card). But if no one is checking that real closely, there might could be areas for abuse."

Nichols became director of finance a year ago when the Madison County Commission decided to convert to a centralized accounting system. Previously, each county department essentially operated independently concerning the use of credit and store cards for county purchases. Under the new centralized Finance Department, Nichols and assistant Bill Vinson are attempting to discover each credit card, Fuelman card and store card, such as a Wal-Mart or Home Depot card, that has been issued for county purchases.

Their latest request for information from each county department was issued on April 18 with a response deadline of May 1 imposed. But reports keep trickling into their office, well past the deadline.

"Short of wrestling these folks to the ground, pulling out their wallet and seeing what's in it, you just don't know what's out there," Vinson said. Formerly Madison County's purchasing agent, Vinson has been in the county's Finance Department 23 years and is now an assistant to Nichols.

"We can ask for the information, but we just don't know if we're getting it all in," Vinson said.

And with so many purchasing cards of all types in the different departments, including the Fuelman numbers, Nichols wants to get a handle on their supervision.

"There's just a big risk for fraud to take place," Nichols said. "Not that I'm saying anything has, but there's a big potential for fraud."

Fuelman users

With one card assigned to each of its 63 vehicles, the Madison County Volunteer Fire Department has the most Fuelman cards. With one card assigned to each of its 62 vehicles, the Sheriff's Department runs a close second.

The Sheriff's Department easily spends the most on Fuelman purchases, slightly under $140,000 in the last fiscal year, ending June 30, 2005. The volunteer fire department, which has its own fuel tanks available at Station 1 on Harts Bridge Road, spent only $1,047 on Fuelman purchases during the same period.

The county's total bill for Fuelman was $170,162 in 2004-05. The projected Fuelman cost for 2005-06 is $194,161.

The county Health Department has 18 Fuelman cards. And although the school system and road department have their own fuel tanks, Vinson said at least six Fuelman cards are issued to the school system for use on field trips and other official business outside Madison County.

The Sheriff's Department

Madison County Sheriff David Woolfork initially wasn't certain if Fuelman was the best option for his department. But he quickly learned that "Fuelman is the way to go. It's been really helpful for us."

And he doubts if any of his personnel have tried to use the cards for personal gain.

"I want to assume all of my officers are honest," he said. "But we closely monitor the cards. The print out (receipt) you get (after using the card) tells us the number of miles per gallon that car is getting. If the car has been getting 20 miles a gallon and suddenly shows 5 miles a gallon, you know something's not right.

"That has never happened, but if it did, we would hope there was a big hole in the gas tank."

When Woolfork first joined the Sheriff's Department 30 years ago, all fueling was done at the school bus garage gas tanks on Harts Bridge Road, close to South Side High School.

"That was really an inconvenience when the gates were locked," he said. "And that was a long drive if you were in the north end of the county."

Later, the Sheriff's Department used gasoline tanks at Jackson Energy Authority, and the county reimbursed JEA. But when JEA remodeled its properties, the Sheriff's Department began using Fuelman. Nichols said the county has considered installing its own fuel pumps, but the expense ended the discussion.

The Fuelman card is accepted at 30 gas stations in Madison County, and Woolfork said access to Fuelman pumps nationwide has not been a problem when deputies are transporting prisoners.

The Fire Department

In theory, if each of Madison County's 160 volunteer firefighters signed a Fuelman-card agreement for each of the department's 63 vehicles, there would be more than 10,000 possible users. Actually, only 59 volunteers have signed Fuelman card agreements so far this year, and most individuals are limited to the vehicles at the fire stations where they are assigned.

Fuelman is not the first option for most stations, as evidenced by the $1,047 spent on Fuelman throughout the department last fiscal year. The department's total fuel bill was $14,901.

"I don't know anybody who uses the Fuelman cards," said Don Chism, a Madison County volunteer firefighter for 37 years. He is captain of Station 2 in the Madison Hall Community off Riverside Drive near Sadie Lou.

"If we need fuel, we go to the tanks at Station 1 on Harts Bridge Road," Chism said.

Fire Chief Kelly Holmes, who helped organize the volunteer department in 1958, has a 1,000-gallon gasoline tank and a 1,000-gallon diesel tank at Station 1, where the dispatcher is located. The dispatcher has the only key to the locks at the tanks, and the key must be returned to the dispatcher before the truck leaves the station.

"I've never caught anybody (trying to steal fuel for a personal vehicle), and I don't think we've got anybody who would do it," Holmes said. "If we did, we wouldn't need that fella. ... It has to be an honor system, though, like with most anything else."

Mileage can't be used as a Fuelman indicator of fuel used in the fire trucks because they mainly are stationary with motors running while fighting a fire.

"Our trucks run on diesel, and we can make eight to 10 runs on a tank of diesel," Chism said. Station 2 has already responded to nearly 90 fire calls this year. It had 112 last year.

With 16 stations located throughout the county, most fires are within five miles of a station. So most fuel is used pumping water at a fire location.

Holmes said the volunteer firefighters are not reimbursed for gasoline expenses they incur while driving personal vehicles to fire calls throughout the county.

"There's no telling what these men give out of their own pockets to serve this county," Holmes said.

Fuelman benefits

Fuelman is especially convenient because the company automatically deducts road taxes from the charges at the pump. The county is exempt from paying road taxes, which total 39.8 cents per gallon of gasoline and 42.8 cents per gallon of diesel, according to the Tennessee Department of Revenue.

If the county had to reimburse employees for fuel purchases, at best it would be a lengthy process to get reimbursed for the road taxes. And it might be difficult to credit that reimbursement to the proper county department, Nichols said. Plus, budgets would have to increase on the front end to make up for the road tax that would have to be paid prior to any reimbursements.

Nichols and employees of the Finance Department are researching different types of purchasing-card systems that could replace the present system. If such a purchasing system were approved, a single purchasing card would replace all the various charge cards being used by county departments.

But a major concern centers on whether the new purchasing card would have the capability of automatically deducting the road tax from fuel purchases, like Fuelman.

Nichols believes a new purchasing-card system could be in place by autumn, if approved by the County Commission.

"But I don't know how long it would take to get implemented," Nichols said. "We want to make sure we have enough safeguards. If somebody wants to do something wrong, they can figure out a way to get around it. But we want to make this as fool-proof as possible.

"Our ultimate goal is to eliminate as much opportunity for fraud as possible," Nichols said.

Visit jacksonsun.com and share your thoughts.


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